Xcel’s rates have risen but are still below state’s average

The gap between what Texas Panhandle residents pay for energy and those in deregulated areas of the state is shrinking, but Xcel Energy rates remain lower than the statewide average.


Residential power is still about 1.8 cents per kilowatt-hour more expensive in deregulated markets than in the Texas Panhandle, down from a 6.5 cents per kilowatt-hour difference in 2006.

But a Texas Coalition for Affordable Power study found energy prices have risen in single-provider areas like the Texas Panhandle over the last 10 years while dropping in the 85 percent of the state that is deregulated.

Deregulated areas comprise most of Texas outside of the Panhandle, South Plains and certain cities such as El Paso and Austin.

Those areas allow energy companies to vie for customers’ business in a free market overseen by the Electric Reliability Council of Texas, or ERCOT.

The annual study found deregulated customers would have saved $26 billion by living in single-provider areas from 2006 to 2015.

Higher bills from Xcel Energy, which has a monopoly on Texas Panhandle homes and powers most area businesses, are a result of costly technological upgrades, spokesman Wes Reeves said.

The average residential bill has increased 19.8 percent per kilowatt-hour since 2006.

Fluctuations in fuel pricing, particularly natural gas, typically impact deregulated energy providers more heavily than single-provider zones.

ERCOT providers often enter contracts to use a certain amount of a particular fuel, while single-provider enterprises like Xcel own multiple fuel sources and can adjust usage to respond to pricing changes.

“No one can predict the future exactly, but we can predict some stability in our energy costs through some of the things we’re doing,” Reeves said.

“I don’t believe we’re as exposed to that as they would be.”

Despite deregulated rates creeping downward and regulated markets shooting up, TCAP analyst and report author R.A. Dyer said a point of intersection was no sure bet.

Competitive regions inherently have costs such as marketing that are not used to the same degree in noncompetitive areas, Dyer said. Then there’s the time cost in shopping for a new energy provider each year for what could be a few bucks worth of savings.

“It’s unclear when and if there will ever be parity between the prices of competitive areas of the state … and those with single providers,” Dyer said.

“There are various costs hardwired into the competitive system, which may be adding to the cost of retail and residential (energy) in competitive areas.”

Texas’ price per kilowatt-hour across all markets ranks dead middle among U.S. states.

In the Amarillo area, though, Xcel regional vice president of regulatory and strategic planning Bill Grant isn’t sure prices will remain below the deregulated average.

Fuel cost fluctuations account for just 40 percent of local bills, Grant said.

Major investments such as the three wind farms expected to go online in 2020 will hike residential bills, though Xcel has said the wind farms will lead to $2.8 billion in net savings over the next 30 years.

“I’m not going to sit here and be able to tell you that, if we end up having to build a lot of infrastructure here, for our location there will never be a crossover,” Grant said.

Xcel Energy’s Texas rates per kilowatt-hour:

Residential;Commercial and Industrial;Overall;Texas Retail


2007;$0.0827 $;0.0575 $;0.0632

2008 $;0.0954;$0.0647;$0.0709


2010 $ 0.0820 $ 0.0489 $ 0.0561

2011 $ 0.0889 $ 0.0502 $ 0.0582

2012 $ 0.0921 $ 0.0475 $ 0.0563

2013 $ 0.0961 $ 0.0517 $ 0.0606

2014 $ 0.1028 $ 0.0566 $ 0.0656

2015 $ 0.1033 $ 0.0525 $ 0.0622

2016 $ 0.1000 $ 0.0492 $ 0.0590

2017 $ 0.1050 $ 0.0527 $ 0.0628


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